A credit card is a system of payment in which money is not removed from the credit card user's account after every transaction. A credit card issuer, which may be a bank or an entity associated with a bank, lends money to the user to be paid to a vendor. An interest rate is associated with the money lent to the user. Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.
Because of intense competition in the credit card industry, credit card issuers often offer incentives such as frequent flyer points, gift certificates, or cash back to try to attract users to their program. Credit cards that offer attractive incentives often have high interest rates, and credit cards with low interest rates often lack attractive incentives.